and Recent Cases Presented By: Kate Becker Audrain County - - PowerPoint PPT Presentation
Audit Findings and Recent Cases Presented By: Kate Becker Audrain County Collector of Revenue NO JUDGING!!!! All of us have had an Audit finding that was taken out of context or the source was completely out of our control. The point of this
Presented By: Kate Becker Audrain County Collector of Revenue
All of us have had an Audit finding that was taken
to point fingers or judge but rather learn from the audit experiences of others.
Collector received December postmarked
mail in January and the receipt showed the post marked date.
Collector closes out their day at 3pm to
balance and complete their deposit. Any payments received after 3pm will show a date of the next business day.
January postmark but base tax payment. Auditor wanted them to
deposit the money and send a bill for the rest. Collector would contact the tax payer and would hold check waiting for the difference to be sent in.
Auditor also wrote them up because the taxpayer requested that
the check be mailed back or shredded.
They felt that we should deposit all the money first and then decide
what it was for later.
Why yes we do! Who else is going to do it? Just document, document, document!
Collector annually went out for bid for the collated stuffing of their
tax bills.
The winning bid, since 2015, employed the Collector’s Sister. Rather than paying the company/service, the Collector paid the
employees directly out of their Tax Maintenance Fund.
A local attorney complained and brought to the Collector’s
attention that it was an ethics violation.
Collector contacted the County Attorney and the Missouri Ethics
Commission for opinion.
Nepotism is when any public officer or employee in Missouri, who by
virtue of his office or employment, names or appoints to public
consanguinity (blood) or affinity (marriage or adoption). (Article VII, Section 6 of the Missouri Constitution). In addition, the political subdivision’s own policies and procedures should be consulted.
The penalty for nepotism is automatic forfeiture of office. Legal
action may be pursued (by the appropriate prosecuting attorney or disciplinary authority) to remove the individual from office or employment.
Collector voluntarily resigned office but stayed on as
Collector until the Governor appointed a replacement.
Replacement was the Collector’s Chief Deputy. The appointed Collector hired the resigned Collector as
their Chief Deputy.
The Collector, before all of this happened, had already
filed to run for another term.
Resigned Collector won their re-election and is again the
Collector of that County.
I made a mistake. I thought that going out for bid absolved me from
the nepotism clause. I don’t feel that what I did had malicious intent and I owned by error and resigned.
EMBEZZLED OVER 12-15 MONTHS
Employee would:
Take a cash payment Enter it into the collection system Hand the receipt to the tax payer Back out the payment Pocket the cash
Tax Payer was told by their title company that the bill was not paid
and came in to the Collector’s office to see why.
They brought in receipt to show proof of payment. The Collector reached out to the Commission who reached out to
the Prosecuting Attorney who reached out to the Highway Patrol.
Suspected employee was out on leave and has chosen not to
return.
This is currently under investigation.
Collector called software and had them block the ability to delete
payments once saved.
Due to the on-going investigation the Collector’s Office was unable
to accept cash payments during the 2018 Tax Season.
An Audit was requested from the MO State Auditor’s Office. Collector found that the suspected employee was not bonded
correctly.
Per 52.300 …” Before entering upon the duties for which they are
employed, deputies and assistants shall give bond and security to the satisfaction of the collector. The bond for each individual deputy or assistant shall not exceed one-half of the amount of the maximum bond required for any collector pursuant to sections 52.020 to 52.100. … The premium of the bond shall be paid by the county or city being
No matter how much you trust your employees be sure that your software company is protecting the integrity of your data. Make sure your staff is appropriately bonded and you are checking your receipt sequence numbers. Also, if you are taking prepaid payments the County needs an ordinance per RSMo 139.053.
ESTIMATED AMOUNT TAKEN $316,758 OVER 26 MONTHS
Collector opened an Escrow Account at the County’s Bank without
knowledge of the new County Auditor.
All checks made to this Collector’s office were made out to the
Collector by name.
Collector would deposit checks into this Escrow Account that should
have been deposited into the Collector’s General Revenue account.
Collector would then write a check to themselves as if transferring
money from one account to another but would deposit funds into their personal account.
The Bank contacted the Prosecuting Attorney of that
County with what they considered “suspicious banking activity.”
The Prosecuting Attorney the called the Sherriff who
referred the matter to the FBI.
That same day the Sheriff and the Presiding
Commissioner called the Collector into chambers who admitted to embezzlement and resigned office effective immediately.
The Collector’s Office was locked and employees worked in other
Collector was appointed. (Collector resigned March 15th)
All the Collector’s bank accounts were frozen until the completion
The MO State Auditor’s Office conducted a thorough investigation
On March 4th, 2019 (the same day they would have officially been
retired) the Collector was sentenced to 30 months in Federal Prison. They have lost most, if not all of their retirement, and are court
The new Collector had to distribute the partially embezzled 2015-
2017 RR & Utility and any embezzled 2015-2017 tax revenue with funds paid from the Bonding Company.
Trust no one. I was the Deputy and I followed orders. Looking back
there were things that rubbed me the wrong way and I should have acted on it. If you think something is wrong it probably is. They are going live with their new software sometime in the next two months.
2015-2018 AS PER HTTPS://WWW.AUDITOR.MO.GOV
Does not have proper procedure for non sufficient funds checks. * Does not account for the numerical sequence of receipts. * Access to the property tax system is not adequately restricted. Does not store backup files at an off-site location. Does not have adequate documentation for their petty cash
Refunds of overpayments are not properly recorded. * Improperly calculated late payment penalties. Improperly calculated commissions & assessments. Does not properly document voided or deleted transactions. * Collector does not reconcile to the bank statements. *
*Will be discussed in our Best Practices Panel
52.360. Daily deposits and reports — interest. — ”The
county collector, in all counties of the first class not having a charter form of government and in all
counties of the second class, shall deposit each day in the depositaries
selected by the county for the deposit of county funds, all money received by him as county collector during the day previous, and make a daily report thereof to the county auditor…”
Collector uses Jaguar which endorses checks
during the scanning process.
Auditors wanted all checks manually endorsed
immediately upon receipt.
139.210. Monthly statements and payments. — 1. Every county collector and collector-treasurer, other than the county collector of revenue of each county of the first or second classifications,
and except in the city of St. Louis, shall, on or before the fifth day of each month, file with the
county clerk a detailed statement, verified by affidavit of all state, county, school, road and municipal taxes, and of all licenses by the collector collected during the preceding month, and shall, except for tax payments made pursuant to section 139.053, on or before the fifteenth day of the month, pay the same, less the collector's commissions, into the county treasuries and to the director of revenue.
classification* shall, before the fifteenth day of each month, file with the county clerk and auditor a detailed statement, verified by affidavit, of all state, county, school, road, and municipal taxes and of all licenses collected by the collector during the preceding month, and shall, except for tax payments made under section 139.053,
commissions, into the treasuries of the appropriate taxing entities and to the director
Treasurer needs to inform CERF of what their distribution will be by the 20th.
139.250. Failure to make payment — forfeiture — proceedings against defaulting collector. — 1. If any collector or collector-treasurer fails to make payment of the amount due from him or her on settlement, or in the time and manner prescribed by law, he or she and his or her sureties shall be liable to pay, as a penalty, ten percent a month on the amount wrongfully withheld, to be computed from the time the amount ought to have been paid until actual
whether for state, county, city, town, district or school taxes, general or special, except that this section shall not apply to any collections related to taxes paid under protest or as part of a disputed assessment.
treasurer in default and his or her sureties, informing them that a motion will be made to the circuit court of the county for a judgment against the collector and his or her sureties, for all sums of money due from him or her to the state or county, as the case may be, at time of making the motion, together with the penalty aforesaid.
Recommends that you keep the voided check and staple it to the stub. We also cut the signature out for an added level of protection.
139.031.2 Upon receiving payment of current taxes under protest pursuant to
subsection 1 of this section or upon receiving from the state tax commission or the circuit court notice of an appeal from the state tax commission or the circuit court pursuant to section 138.430, along with full payment of the current tax bill before the delinquency date, the collector shall disburse to the proper official all portions of taxes
not protested or not disputed by the taxpayer and shall impound in a separate fund all portions of such taxes which are protested or in dispute. Every taxpayer protesting the payment of current taxes under subsection 1 of this section shall, within ninety days after filing his protest, commence an action against the collector by filing a petition for the recovery of the amount protested in the circuit court of the county in which the collector maintains his office. If any taxpayer so protesting his taxes under
subsection 1 of this section shall fail to commence an action in the circuit court for the recovery of the taxes protested within the time prescribed in this subsection, such protest shall become
null and void and of no effect, and the collector shall then disburse to the proper official the taxes impounded, and any interest earned thereon, as provided above in this subsection.
Has not established adequate controls related to partial payments…
139.053.1 The governing body of any county, excluding township counties, may by ordinance or order provide for the payment of all or any part of current real and personal property taxes which are owed, at the option of the taxpayer, on an
annual, semiannual or quarterly basis at such times as determined by such governing body.
taxes owed for the current tax year in which the payments are to be made shall be estimated. The collector shall submit to the governing body the procedures by which taxes will be collected pursuant to the ordinance or order. The estimate shall be based
based on the estimate divided by the number of pay periods in which payments are to be made. The taxpayer shall at the end of the tax year pay any amounts
tax year refund to the taxpayer any amounts paid in excess of the property tax
shall be an amount paid by the county only once in a calendar year.
Has not established adequate controls related to partial payments (slide 2)…
the real or personal property taxes owed to the county, then such county may charge the taxpayer interest on the amount of property taxes still owed for that year.
this section shall first agree to provide the county collector with reasonable and necessary funds to implement the ordinance or order.
property taxes by financial institutions, as defined in section 381.410, who pay tax obligations
which they service from escrow accounts, as defined in Title 24, Part 3500, Section 17, Code of Federal Regulation, as amended.
Top finding in regard to partial payments were that they were not properly receipted.
139.090.1. Receipt for payment — duplicates — payment on parts
139.150. Duplicate receipts And in making collections on the said
personal delinquent lists, the said collectors, except collectors in counties of the first or second
classifications, shall give duplicate receipts therefor, one to be delivered
to the person paying the same, and the other to be filed with the clerk of the county commission, who shall charge the collector therewith.
139.040. Acceptable medium of exchange in payment of taxes. — A
county or city collector, or other collection authority charged with the duty of tax or license collection is authorized but not obligated to accept cash, personal check, business check, money order, credit card, or electronic transfers of funds for any tax or license payable to the county. The collection authority may refuse to accept any medium
medium of exchange submitted without the statement of property taxes due and assessed as required by section 52.230. Refusal by the collection authority to accept alternative means of payment beyond those approved by the collection authority shall not relieve an obligor
interest and penalty on any overdue unpaid tax or license obligation pending submission of a form or payment approved by the collection authority.
Make sure you are listed as the Collector in the agreement. Make sure if you quote statutory language that it is current. Make sure you are evaluating them 5-10 years such as having your
attorney review it for validity and accuracy.
Note: If you are re-doing your contracts make sure you have the Commission sign them first. If the City signs them first and the Commission refuses to sign your old contracts are already void.
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The statutes allowing us to collect on behalf of a City are 50.332 and 70.220.
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The statute allowing for the Collection of City abatements and nuisances is 71.285.
Does not keep a receipt for payments received on behalf of other counties…
Consider getting a carbon copy form or making
photocopies of all of the payments you mail out. It doesn’t hurt to keep them.
Audrain completed 196 Transaction for other Counties
last FY.
Boone, Callaway, Montgomery, Pettis, Adair,
Livingston, City of St. Louis, Laclede, St. Charles, Pike, Greene, Pulaski, Johnson, Marion, Crawford, Jackson, Dent, & Warren
Statute:
Collector: RSMO 139.100.2 “Collectors shall, on the day of their annual
settlement with the county governing body, file with governing body a statement, under oath, of the amount so received, and from whom received, and settle with the governing body therefor; …”
Collector-Treasurer: RSMO 139.420.1 “The collector-treasurer of any
county that has adopted township organization, at the term of the county commission to be held on the first Monday in March of each year, shall make a final settlement of the collector-treasurer's accounts with the county commission for state, county, school and township taxes; …”
What do you do? We don’t have the authority to abate a single tax levy
Nor are we allowed to disburse tax funds to an entity
that no longer exists or has an elected board to be comptrollers of said funds.
Could you turn it over to unclaimed fees? Could you give it to the Treasurer for the non-
distributable school fund?
Similar situation to the